$10 million Ponzi scheme: Guilty

Fraud victims included Mike Miller

Jan. 24, 2014

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A federal jury has convicted a Sioux Falls man on more than two dozen counts of wire fraud and mail fraud in connection with a Ponzi scheme that defrauded people out of more than $10 million.

Randal Kent Hansen, 65, faces up to 20 years in prison on each count when he is sentenced April 28.

Hansen solicited investors to two hedge funds known as the RAHFCO Funds LP and RAHFCO Growth Fund after he teamed up with disgraced New York broker Anthony John Johnson in 2007. At the time, Johnson already was in trouble with authorities for defrauding investors through his brokerage.

Investors in the RAHFCO funds included NBA player and Mitchell native Mike Miller. As many as 90 investors were from South Dakota, and there were other victims across the country, said U.S. Attorney Brendan Johnson, whose office prosecuted Hansen.

Hansen collected more than $20 million from investors, and used the later investments to pay off those who got in early, authorities said.

“We don’t know what he was doing with the money,” Johnson said. “The guy has a lot of nice assets. The difficulty is tracing the money he was receiving from RAHFCO to those assets.”

During the trial, Johnson, who already is serving a 10-year prison sentence, testified against Hansen. Johnson, Hansen and co-conspirator Vincent Puma disagreed about where the money ended up.

In 2011, as the Ponzi scheme unraveled, Hansen sent an email known as the “Dark Day” email to investors, informing them that all of their money had been lost.

“It was a dark day for a lot of people,” Johnson said.

Besides the criminal actions against those associated with RAHFCO, investors have filed civil suits to recover money.

Scott Abdallah, a lawyer representing Miller, has a case pending in state court. Puma has repaid Miller “a substantial amount” of the money he lost, Abdallah said.

Besides the RAHFCO funds, there were other entities involved in the scheme that may be sheltering money taken from victims, Abdallah said.